Analysts believe that the vacation rental market in the U.S. will see strong growth in the coming quarters. In 2010, the vacation rentals earned $85 billion in income. PhoCusWright research estimates that at present, only 10% of the American population has used a vacation rental. Surely there is a large market to tap. This potential is driving bigger travel players like Priceline and Orbitz into the market. Recently Priceline added Bed and Breakfast offerings to its website, and Orbitz launched its own website for condo and vacation home rentals.

HomeAway’s Financials
HomeAway’s (Nasdaq:AWAY) Q2 revenues grew 22% over the year to $72 million. Adjusted earnings for the quarter grew 15% over the year to $20 million. Listing revenues grew 18% to $60.2 million. Paid listings grew 17% over the year to nearly 736,000 a year. Average revenue per listing fell 0.9% over the year to $336. The membership renewal rate stood at 75% at the end of the quarter, compared with 76% a year ago. Unique visitors to the website grew 20% over the year to 159.2 million.

For the current quarter, HomeAway projects revenues of $72.8 million-$73.6 million, with an adjusted EBITDA of $22.6 million-$22.9 million. It expects to end the year with revenues of $278.6 million-$280.6 million and adjusted EBITDA of $79.4 million-$80.4 million.

HomeAway’s Acquisition Focus
HomeAway is expanding its reach in international markets through acquisitions. It recently acquired Top Rural S.L., an online portal for independently-owned rural accommodations in Southern Europe. Top Rural’s site toprural.com is known for bed and breakfasts and vacation rentals in the European countryside. At the end of 2011 it had more than 11,600 paid listings and 29,900 free listings in rural France, Spain, Italy, and Portugal. Top Rural was founded in Madrid in 2000. Its site is operational in eight languages, including Spanish, Portuguese, French, Catalan, and Dutch.

Last quarter, it also acquired minority stake in China’s Tujia.com. Tujia is the first online vacation rental service provider in China. The site caters to middle to high-end Chinese travelers. The transaction is subject to regulatory approval from the Chinese government.

HomeAway’s Online Booking Platform
As part of its offering expansion, HomeAway is also in the final stages to release an online booking platform for customers. The platform is expected to be released by the current quarter. The platform will enable consumers to check availability, book property, and send online payments with no booking fee to the traveler. The tool will be available as an optional feature to property owners. Once a traveler requests a booking, property owner will have 24 hours to accept it, within which time they would be able to vet the traveler’s details as well.

HomeAway’s stock is trading at $25.10 with a market capitalization of $2.07 billion. The stock touched a high of $39.70 in September 2011